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Who is buying into Lotus F1?

There are interesting developments today at Lotus F1 Team where a new minority shareholder has been announced. The firm is called Infinity Racing Partners Ltd and it has acquired a 35 percent stake in the team. The name is interesting given that Renault’s partner Nissan has the Infiniti brand, which is a big sponsor of Red Bull Racing.

The team says that Infinity Racing is “an investment consortium whose special purpose vehicle is comprised of private investors that include an American hedge fund manager, an Abu Dhabi-based multinational business group and royal family interests of a major oil producing nation”.

Further investigation reveals that the company was registered at Companies House on June 3 and has five shareholders. The dominant stake with 60 percent of the shares is a firm called Universal Sports Group LLC. There are a number of companies that operate under this name in different US states, but this particular one is headquartered in Brunei, which is a major oil producing nation with a royal family. The Sultan of Brunei is worth around $19 billion and has a celebrated car collection of 7,000 cars, reckoned to be worth about $5 billion. However the only family member who has shown any active interest in F1 is Prince Jefri, one of the Sultan’s brothers, who owned Asprey in the 1990s and was a sponsor of Ferrari.

Twenty percent of Infinity is owned by Crescent Investment Management LLC, a New York-based investment business, controlled by American-born Mansoor Ijaz. His father was a Professor of Physics at Virginia Tech, who was involved in the early days of Pakistan’s nuclear programmes before he settled in the US. Mansoor set up his own investment business in 1990 after an impressive schooling. He has dabbled in political commentary in addition to his investment work and is well-connected in US government circles. He personally owns 700 of the 1000 preference shares in Infinity and thus controls the firm as these shares control the voting rights.

The third partner in the firm, with 20 percent is the private Abu Dhabi investment firm Al Manhal International, which is involved in the energy sector, “developing, promoting and participating in energy and technology related projects”. This is run by Suhail Al Dhaheri, who 300 of the 1000 preference shares in the new Infinity firm.

“Infinity Racing’s principals have exceptional expertise and a proven strong track record in developing and delivering high quality technologies,” said Gerard Lopez. “This partnership will enable us to increase Lotus F1 Team’s competitive advantage related to KERS technology as it becomes more central to Formula 1’s push for environmentally sound racing, while also making Lotus F1 Team more marketable as a brand, opening up additional major sponsorship opportunities.”

Agree; wouldn’t find this anywhere else on the F1 sites on the web and is another reminder (as if it were needed) of the value of this blog. Wonder if this will make any difference to Kimi’s destination for 2014?

thank you for sharing your delight at this source of transparent information as I also find this rather unique amongst XXI st century entertainment and tourism business platforms which is in my opinion a long way from racing and closer to high-stakes money laundering via solid tax havens like the one that this holding company branded as Genii Capital is based in Luxembourg.

Ah, His Royal Highness Pengiran Digadong Sahibul Mal Pengiran Muda Jefri Bolkiah ibni Al-Marhum Sultan Haji Omar Ali Saifuddien Sa’adul Khairi Waddien, a colourful chap. Not sure they ever worked out where that $14bn went to in the end

Sorry this is so long, but it’s pretty interesting; Lotus might have to be careful. Taken directly from Wikipedia:

Prince Jefri has had a number of legal issues with the state of Brunei, which have amounted to the most costly legal battle in the world.[16]

Brunei is a gas and oil rich state ruled by the Sultan in a constitutional sultanate;[17] the Sultan has control over every aspect of life in Brunei.[18] The Sultan was, at one time, the richest man in the world.[19] From 20 October 1986 to 23 February 1997 Prince Jefri was the Minister of Finance for Brunei,[3] responsible for dealing with revenue from oil and gas through the state body Brunei Investment Authority (BIA),[20] of which Prince Jefri was chairman.[10]

Prince Jefri also owned a network of companies and investment vehicles under the name Amadeo run by his son Hakim,[10] which was used to buy the luxury goods company Asprey and build an amusement park and other projects in Brunei.[19] In July 1998 the Amadeo group collapsed under US$10 billion in debt.[21] Between 1983 and mid-1998 some US$40 billion of what were called “special transfers” were made from the accounts of the BIA.[3]

An independent investigation was undertaken into the circumstances of these special transfers, concluding that in round figures, US$14.8 billion were paid to the accounts of Prince Jefri, US$8 billion to accounts of the Sultan and US$3.8 billion for Government purposes; the destination, purpose and recipients of the remaining transfers were not established.[3] Due to the secretive nature of the state and the blurred lines as to where the royal family’s finances and the state finances began and ended, establishing the true course of events is very difficult.[19]

Prince Jefri was accused of misappropriating state funds to pay for his own personal investments, bought through BIA and Amedeo companies and removed from his position as head of BIA.[22][23] In February 2000 the Bruneian government attempted to obtain a freezing order on Prince Jefri’s overseas assets, which led to him countersuing in New York.[22] Following protracted negotiations a settlement agreement was signed by the Prince in May 2000,[3] the terms of which were never made public.[21] However, Prince Jefri claimed assurances were made to him by the Sultan with regards to keeping certain properties in order to maintain his lifestyle, which BIA denied.[3][21]

In accordance with the settlement agreement signed in 2000, the prince began to return his assets to the state, including more than 500 properties, both in Brunei and abroad, more than 2,000 cars, 100 paintings, five boats, and nine aircraft.[21] In 2001 ten thousand lots of Prince Jefri’s possessions went to auction.[24]

However, the BIA alleged that the Prince failed to uphold the agreement by failing to disclose all his accounts, and allowing money to be taken from frozen accounts,[16] and restarted legal proceedings in order to gain full control of the Prince’s assets. After a number of appeals,[18] this finally reached the Privy Council in London, which can serve as Brunei’s highest court of appeal as a result of Brunei’s former protectorate status.[25] The Privy Council rejected Prince Jefri’s evidence, describing his contention that the agreement allowed for him to retain a number of properties as “simply incredible”,[26] and ruled in favour of the Government of Brunei and the BIA; consequently the Prince’s appeal was dismissed and he was ordered to return the rest of his assets to Brunei.[3]

The strange thing is that there is a quote from Gerard Lopez in the article confirming the details. I have looked and can not find a denial which would have caused a removal of the offending content from the website I imagine.
I find the Daily Telegraph to be one of the most trustworthy reads and I have been an avid follower since it uncovered the dirt of MPs expenses. It is a serious newspaper and there arent many of them remaining! I really doubt that any journalist writing for it would make up a quote from a senior F1 manager and if they did then why didnt Lopez get it removed? It seems more logical that it is accurate. I would not have wanted to dismiss the expenses affair so it could be wrong to dismiss this. There must be some fire with that smoke.

Certainly a lot of capital right there if they have a keen interest in winning. I guess this would also open up a seat for a Muslim-born driver to wheel one of the Lotus cars. In addition, a new network into the F1 world…some real James Bond-ish type stuff, as well.

this is indeed a revelation in my experience.
thank you for the robust analysis Joe.
as a way of enhancing the value of your brand please seriously consider the following data bits which yours truly discovered while reading a World Business Newspaper written in the Queen’s English and published on a trademark newsprint which appears to me the same color as pink. however, I am someone who has colorblindness so it is to be considered as an estimate only because others have said it looks more like peach. any how…,

a headline reads ‘ Porsche families buy Qatari stake ‘ on page 16 which features a black & white captured image of the nose of one of their many mobility products this Stuttgart based corporation currently manufactures across the globe.
the most precious information is from the mouth of Porsche SE’s chairman Wolfgang Porsche who is quoted as saying ” All of Porsche SE’s common stock is now again held by the Porsche and Piëch families.”
it describes in detail for anyone interested in reading the entire article how this holding company is prospering and is once again controlled by the heirs of Doctor Ferdinand Porsche who founded his engineering consultancy with his son ‘ Ferry ‘ in Gmund, Austria after the allied forces released him from any charges stemming from his consultations with leaders of a now defeated political party in 1945.
be well people and thank goodness this blog exists to get feedback on how important this minutia is actually in the scheme of things.

Interesting, these people obviously believe they will get a return on their investment. Yet it felt before very much as if Genii were losing money on the team. Presumably there has to be some prior agreement on what rate of ROI will be paid.

great and brave query sir rpaco. it is my experience that with these types of financial schemes based in legal tax heavens like Luxembourg, the corporation is encouraged to show a loss thereby benefiting the partners from an accounting perspective.

“…exceptional expertise and a proven strong track record in developing and delivering high quality technologies…”

Oh good lord, I’m past it. What’s my motor racing morphed into while I wasn’t looking? We’ve come a dickens of way from Charles and John Cooper sketching out the chassis of their latest car in chalk on the workshop floor at Surbiton.

“Infinity Racing’s principals have exceptional expertise and a proven strong track record in developing and delivering high quality technologies”

Standard Horseshit spun by any Pink Sheet pump and dump outfit. Looks like the new age financiers , Lopez & Wolf are finding their way into the sport learning how to package and spin it for profit. Speculation?, Timely given the rumoured F1 floatation. Bernie floating on the market and cashing out before it all goes poof would be a fitting swansong for the maestro. F1 entering the junk bond era?

Joe,
While we’re on the topic of the business of the sport. Here’s a solid question for you(I think), not sure how well you know Bernie? but, In succession would you think he is more inclined to position F1 his lifes work onto a successful transitional path at the expense of a little profit to assure it’s success or do you think he is stricly about the ultimate payout as a measure of personal success and family legacy.

Is it pure profit for him or is there an emotion attachment after a lifes work to see this thing he has built up “his baby” do well going forth? Curious if you have any insight?

If I had to put money on it , I think Bernie would make the right move for the sport. I know a lot of people like to criticize him considering the revenue he’s pulled out of the sport. I just get he feeling he’s a ‘big picture’ thinker. Hope I’m right.

Is there an appreciation and passion for F1 with him or is this just an indifferent guy selling the worn out family business?

Thanks for the response . I’d like to think there is more to Bernie than that and that somewhere in there is a concern for legacy as well as profit. But maybe what makes him so damn good at what he does is pure ruthless capitalism with the clarity not to get distracted by nonessential (in terms of closing deals) considerations.
He’s an exceptional guy and he’s got to go out with some class so hopefully he finds a way for a graceful exit. Even if indicted there is a way for Bernie to have the last word and put his stamp on it, so he should befitting of his contribution – within this sport the man laid the foundation and is s a pioneer.

Are they going to bale out the LMP2s that have been impounded at Le Mans, or is there some distance that can be put between the Enstone operation and other black and gold racing teams carrying the Lotus moniker?

The “Lotus” LMP2 cars are not related to the Genii F1 team; they are simply badged as “Lotus”es as part of a marketing agreement with the team, which is its own entity. In other words, one would not expect Lopez and friends to bail them out.

I’m a bit wary of backers like this, they aren’t a racing company, or a car company (or even a soft drinks company!), it is just some investors wanting to make some money, I may be wrong and they invest in the team but I’m pretty sure they run investment businesses to make money and don’t really care much about how it happens. How long will it take for them to lose interest or decide they have made their money and sell up? I give it a year…

If there is no connection between this “Infinity Racing Partners” and “Infinity brand of Nissan”, then surely Nissan would have a good case for suing for “passing off” what with both being involved in F1. the immediate and obvious reaction, is “is this part of Nissan?” An new organisation with a name deliberately aimed at insinuating a connection with Nissan.

Unless of course the whole thing is both connected with Nissan and is a publicity exercise to get Infinity into the minds of the public, since for me, no matter how many times they say the new name, Red Bull will always be red bull, a drinks company; having the wrong colour body and sticking infinity on the front just makes it cumbersome to say/
No that is not working at all.

Some might say that this is just another cozy deal whereby Genii get to swap some equity for shares in Lotus, with a contra deal on something else somewhere else. In other words no real change. Infinity, after all, seems to be just another investment vehicle (no way is it a hedge fund) in the same way Genii is….

Hi Joe.can we be really sure of Lotus F1 shareholding situation.iirc 1% was sold a few months ago.but the current numbers seems to overlook that.is this a reflection of changes or am omission.going by what’s been sold earlier.$100million for a top 3 F1 team leaves a lot to be considered in light of sahara’s investment into Force India.overall are we looking @ a house of cards actually or something with sound business foundations.?F1 in total?

That Lotus name just keeps popping up! This time in connection with LMS
With copyright in mind, here is a link, actually it is Lotus in brand only. Something I find a little disturbing is the “branding” of cars as major names when they have nothing to do with the design, build of them. I suppose a lot of it evolves due to changing inputs of money, but it seems a bit of a sham.http://www.racecar-engineering.com/news/lotus-and-adess-ag-in-legal-scrap-at-le-mans/

Company’s hiding behind company’s hiding company’s. Who is Geni? What do they make? And Infiniti or is it Infinity, what do they make?. Sultan of Brunei who has no interest if F1 but is now involved in F1? Will this lower the price of a ticket to the Grand Prix? Stinks of money laundering, profiteering. I really am falling out of love with F1.

In one of my worlds it is common for similar institutions to trade investments. It is clear from Joe’s comment that he is either not familiar with this or he really does know why Infinity have invested in the team. Ironically Joe will be in the heart of the financial capital of Europe tomorrow and if he wants a lesson in the mysterious ways in which investment funds work, the guys drinking in The Lamb would be only too willing to educate him…sadly I am busy designing trick bits for F1 carS in Surrey, otherwise I’d be there too :-)